The Bank of England’s Monetary Policy Committee (MPC) has decided to maintain the Bank Rate at 0.1%.
The MPC voted unanimously for the central bank to continue with its existing programmes of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, maintaining the target for the total stock of these purchases at £745 billion.
The committee warned that the outlook for the economy remains “unusually uncertain”. It said it will continue to monitor the situation closely and stands ready to adjust monetary policy accordingly to meet its remit.
The MPC will keep under review the range of actions that could be taken to deliver its objectives. The committee does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.
Frances Haque, Santander UK chief economist, said: “The MPC’s decision to leave Bank Rate unchanged at 0.1% was expected this month, along with the decision to keep the amount of quantitative easing undertaken by the Bank of England unchanged.
“However, although the economy has started to recover, there remains uncertainty caused by the ongoing issues around trade negotiations with the EU as well as the possibility of more stringent measures being imposed if Covid-19 cases start to increase rapidly. As a result, there continues to be a significant possibility of further rate cuts and more quantitative easing to help support the economy as we move through the tail end of 2020.”